Assigned by the Swedish Government for implementation including financing arrangements.

Estonian Climate responsible Organisation

Street:

Kungsgatan 43

Toompuiestee 24

Post code:

BOX 310, S-631 04

10149

City:

Eskilstuna

Tallinn

Country:

Sweden

Estonia

Telephone:

+46 16 544 20 00

+372 62 62 800

Fax:

+46 16 544 22 64

+372 62 62 801

E-mail:

klas.tennberg@stem.se

WWW-URL:

http://www.stem.se

Contact person (for this activity):

-------------------------------------

-------------------------------------

Surname:

Knutsson

Kratovits

First name, middle name:

Gudrun

Andres

Job title:

Senior officer

Counsellor

Direct tel:

+46 16 544 20 72

+372 62 62 841

Direct fax:

+46 16 544 22 64

+372 62 62 845

Direct E-mail:

gudrun.knutsson@stem.se

andres@ekm.envir.ee

(* From 1 January, 1998, the new Swedish National Energy Administration has taken over the
responsibility for the Programme for an Environmentally Adapted Energy System in the Baltic region and
Eastern Europe (EAES Programme) from NUTEK (Swedish National Board for Industrial and Technical
Development).

Viljandi, a beautiful hansa town, more than too years old, with 24000 inhabitants is situated in
the middle of Estonia. The town consists of areas built at different times and the newest one is
Männimäe. There are several boiler plants and district heating networks in Viljandi. One
of the boiler plants in Männimäe area is owned privately by AS ESRO. This plant has five
different types of steam boilers: one DKVR 4-13, two DE 25-14 and two DKVR 10-13 boilers working on
heavy oil. One of the DKVR 10-13 boilers has been converted to wood chips firing.

Type of project:a)

Fuel switching to biofuels

Location (exact, e.g. city, region,

state):

Viljandi town

Viljandi County

Estonia

Activity starting date:

20. November 1994 (Letter of Intent)

In operation from:

September 1995

Expected activity ending date:

31. March 2005

Stage of activity:b)

completed

Lifetime of activity if different from ending date:c)

Expected technical lifetime is 15 years which means that the plant is expected to be in operation
until 2011.

Technical data:d)

An existing oil-fired DKVR 10-13 boiler has been converted to biofuels firing through installation
of an integrated movable inclined grate in the boiler. Furthermore, automatic fuel storage and flue
gas cleaning are included in the project.

Methodological work will be required to define lifetime of activities.

Methodological work will be required to determine for each type of activity what the minimum
data requirements are.

The life time criteria has been arranged in different groups depending on type of implemented activities.
This classification assumes a level of operation and maintenance which is normal

in western countries.

Lifetime of activity

Heat production plants (bio fuel)

25 years

New installation of all main equipment parts (fuel handling system, firing equipment and boiler)
and modernisation of secondary equipment.

15 years

Conversion of existing boiler but new installation fuel handling system and firing equipment.
Modernisation of secondary equipment.

10 years

Limited installation of new equipment (only one part of the three main parts, normally the firing
equipment). Modernisation of other equipment.

Heat distribution systems and sub-stations

25 years

Pre-fabricated pipes and installations using certified contractors and supervisor according to EN
norms and applicable district heating practise

15 years

Pre-fabricated pipes and installations without using certified contractors and supervisor

10 years

Modernisation of existing pipes.

Energy efficiency in buildings

25 years

Additional insulation roofs walls etc. with Scandinavian technology.

New installed heating systems.

15 years

Renovation and balancing of heating systems including thermostat valves.

10 years

Weather stripping windows, doors etc.

* if a combination of measures is done a reasonable lifetime for the project have to be calculated.

4) Cost (to the extent possible):

To the investment costs are referred the cost of the investment proper and the accumulated interest during
the grace period, generally 2 years.

The AIJ/JI cost items are the costs for:

Technical assistance, a technical and administrative support from consultants, during the period from
definition of the project till commissioning. These costs are paid by STEM.

Follow-up, an annual technical and economic follow-up by consultants, hired by STEM, of the operating
results of the plant with the objective to improve on its techno-economic sustainability and its climate
effect. The cost indicated is an average cost per project.

Reporting costs – i e costs in connection with the annual reporting of the project’s
climate effects to UNFCCC. The cost indicated is an average cost per project.

Administration –Costs for seminars, handbooks, education (capacity building) and average costs of
STEM staff per project.

Difference in interest rates. STEM applies for its loans generally an interest rate corresponding to
6-month STIBOR (Stockholm InterBank Rate, in April 1999 3,0 %). Assuming a normal lending rate of 7 % means
that this loan is associated with a cost of 4 % in relation to normal lending rate.

Investment/instalment = the borrower’s possible own financing of the investment, followed by the
borrower’s repayment of the loan.

All costs in USD

Country

Viljandi/ESRO

1995

1996

1997

1998

0

1

2

3

Investment

1. Loan/debt to STEM

622875

671750

579875

502500

2. Added costs

0

48875

15250

0

3.Technical assistance

61250

0

0

0

AIJ/JI

4. Follow up

0

10250

10625

2750

A. Sweden

costs

5. Reporting costs

0

0

1063

2500

6. Administration

66250

0

0

0

7. Difference in interest

4%

26870

23195

20100

8.Accum. costs for AIJ/JI

127500

164620

199503

224853

9.Total costs

750375

836370

779378

727353

Investment

1. Investment/Instalment

0

0

107125

77375

2. Estonia

AIJ/JI

2. Reporting costs

0

0

0

0

costs

3. Other costs

0

0

0

0

4. Accum. costs for AIJ/JI

0

0

0

0

5. Total costs

0

0

107125

184500

1 USD=

8

SEK

0

5) Mutually agreed assessment procedures:

Describe the procedures, including name of organisations involveda):

Ministry of the Environment of Estonia is a central Estonian authority responsible on reporting of
JI projects. This authority assigns a local institution, which is involved in to the evaluation of
the climate effects of this project and takes the main responsibility to continue measuring,
results collecting for JI-reporting.

a) Please ensure that detailed contact information for all organisations mentioned is reported under

section A.2 above.

B. Governmental acceptance, approval or endorsement

Bearing in mind that all activities implemented jointly under this pilot phase require prior acceptance,
approval or endorsement by the Governments of the Parties participating in these activities, which shall be
shown as follows:

(a) In the case of joint reporting, the report is submitted by the designated national authority of one
participating Party with the concurrence of all other participating Parties as evidenced by attached
letters issued by the relevant national authorities;

(b) In the case of separate reporting, the reports are submitted separately by the designated national
authority of each and every participating Party. Information will only be compiled once reports have been
received from all participating Parties.

1) For the activity:

* Subsequent reports:

Second report . First report was submitted 1997.

2) This report is a joint report:

Yes, Endorsement letter was submitted 1997.

3) General short comment by the government(s) if applicable:

cf. Annex II, section B

C. Compatibility with and supportiveness of national economic development and socio economic and
environment priorities and strategies

Describe (to the extent possible) how the activity is compatible with and supportive of national
economic development and socio economic and environment priorities and strategies

The project meets the following objectives in the Estonian Energy Law and the Long-term Development
Plan for the Estonian Fuel and Energy Sector:

- efficient use of energy resources;

- to increase the share of renewable energy sources in the primary energy demand from present 8% to
13% to the year 2010;

- to reduce the environmental damage arising from fuel and energy production, transport, conversion
and distribution;

- to create the reliable energy conservation system stimulating the implementation of energy
conservation measures by consumers;

- to develop co-operation between Baltic, Nordic and Central European countries

D. Benefits derived from the activities implemented jointly project

Whenever possible, quantitative information should be provided. Failing that, a qualitative description
should be given. If quantitative information becomes available, it could be submitted using the update(s).
(If the amount of quantitative information is too large, the source could be indicated.)

E. Calculation of the contribution of activities implemented jointly projects that bring about real,
measurable and long-term environmental benefits related to the mitigation of climate change that would not
have occurred in the absence of such activities

1) Estimated emissions without the activity (project baseline):

Description of the baseline or reference scenario, including methodologies applied:

Present data reflect emission reductions using calculations, according to the top-down baseline method for
emissions from heat sector in Estonian. (Top- Down Baselines setting for the revised Calculations of CO2
emission Reduction, SEI-Tallinn, Estonian Energy Research Institute, May 1999, Tallinn)

2) Estimated emissions with the activity:

Description of the scenario, including methodologies applied:

Emission reductions are calculated using the IPCC Guidelines, using the Carbon Emission Factor (CEF) for
different types of fuel, using actual system efficiency. For boiler conversion, the decrease in emissions
is calculated in relation to the amount of fossil fuel replaced (status quo).

For an energy efficiency project the decrease in emissions reflects the amount of fuel that is saved
through the project. In the case that the system uses renewable fuels, the reduction is calculated
comparing the amount of fossil fuels that was used before the conversion to renewable fuels.

Below comparison is based upon that the base-line scenario represents a status quo solution.

After two years the mazout was replaced by natural gas for the rest of the activity lifetime.

Summary table: Projected emission reduction s:

GHG

Year 1

=1995

Year 2

=1996

Year 3

=1997

Year 4

=1998

...

Year 15

Planned energy production on biofuels, MWh/year

12100

30000

30000

30000

30000

A) Project baseline scenario (revised)

CO2

3629

8670

8583

8496

7317

CH4

N2O

other

B) Project activity scenarioa)

CO2

0

0

0

0

0

CH4

N2O

other

C) Effect ( B-A )

CO2

-3629

-8670

-8583

-8496

-7317

CH4

N2O

Other

D) Cumulative effect

CO2

-3629

-12300

-20883

-29379

-122516

CH4

N2O

Other

Includes indirect GHG leakages.

Summary table: Actual emission reductions :

GHG

Year 1

= 1995

Year 2

= 1996

Year 3

=1997

Year 4

=1998

...

Year 15

Factual energy production on biofuels, MWh/year

9860

25969

30930

30677

30677

A) Project baseline scenario (revised)

CO2

3022

7790

8938

8776

7556

CH4

-

-

-

N2O

-

-

-

other

-

-

-

B) Project activity scenarioa)

CO2

0

0

0

0

0

CH4

-

-

-

N2O

-

-

-

other

-

-

-

C) Effect ( B-A )

CO2

-3022

-7790

-8938

-8776

-7556

CH4

-

-

-

N2O

-

-

-

Other

-

-

-

D) Cumulative effect

CO2

-3022

-10813

-19752

-28529

-124972

CH4

-

-

-

N2O

-

-

-

Other

-

-

-

a) Includes indirect GHG leakages.

F. Additionality to financial obligations of Parties included in Annex II to the Convention within the
framework of the financial mechanism as well as to current official development assistance flows

Please indicate all sources of project funding.

Category of funding

(For each source one line)

Amount

(US dollars)

Loan from NUTEK

666800 USD

Grant from NUTEK for technical assistans

65525 USD

1 USD = 7.50 SEK

G. Contribution to capacity building, transfer of environmentally sound technologies and know-how to
other Parties, particularly developing country Parties, to enable them to implement the provisions of the
Convention. In this process, the developed country Parties shall support the development and enhancement of
endogenous capacities and technologies of developing country Parties

Transfer of environmentally sound technologies and know-how

Describe briefly

Schematically, the transfer of knowledge involves the following activities over time:

i) Technology transfer through STEM technical specialist during the implementation of the project.

ii) Technology transfer through co-operation between foreign supplier and local partner

iii) Conferences, seminars, documentation and training.

iv) Stimulate "net-working" for the exchange of experience between plant owners with
similar problems, e g "bio-clubs"

Technology transfer has taken place through:

STEM technical specialist support to the local project leader;

Knowledge in negotiations to foreign companies;

Knowledge in managing and planning of bigger industrial projects;

Transferring of environmental issues to the local parties;

Transferring of knowledge in operation and maintenance issue;

Operation and maintenance software was introduced to the plant-owners.

Personal from boiler plant has been invited to different seminars and work-shops and
several presentations about company experience have made, documentation for training has been
handed over.

There were arranged seminars through close cooperation between STEM and Estonian partners:

iv)Activities have been supported by STEM to establish Estonian Biofuels Association: meetings
representatives of plant owners and consultants were arranged in Haabneeme, Valga, Võru,
Tartu, Pärnu and Viljandi.

The boiler plant has been visited by specialists of other boiler plants (incl. from Russia, Baltic
Countries), the staff has an exchange of experience with other boiler plants. Estonian Biofuels
Association is established in 1998 ( mainly by "bio-club" and local experts) and the
company is a member.